Market underestimating political catalysts for volatility, UBS' Fitzpatrick says

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The market is too fixated on central banks right now and possibly underestimating the political risks, according to Dawn Fitzpatrick, global head of equities, multi-asset and the O'Connor hedge fund business at UBS Asset Management.

"It feels like the markets are very central bank fixated and not paying enough attention to the political angle, with the U.S. elections, with the referendum in Italy," Fitzpatrick said on CNBC's "Squawk on the Street" shortly after appearing on a panel at the Delivering Alpha conference sponsored by CNBC and Institutional Investor.

She said she believes these political risks will "drive more of the market volatility going forward."

U.S. equities have whipsawed in recent sessions amid comments from Federal Reserve officials.

Lael Brainard, a Fed governor, said it would be wise to keep rates low despite continuous economic growth. Dennis Lockhart, Atlanta Fed president, said in a separate speech that a "serious discussion" on raising rates is warranted at the central bank's upcoming meeting. Lockhart announced Tuesday that he is stepping down, effective Feb. 28.

U.S. equities jumped Monday amid Brainard's and Lockhart's remarks, with the three major indexes closing more than 1 percent higher. On Monday, the CBOE Volatility Index crossed 20 in early trade, hitting its highest level since June 28. On Friday, Boston Fed President Eric Rosengren delivered surprisingly hawkish remarks, sending U.S. stocks lower.

— CNBC's Fred Imbert and Gina Francolla contributed to this report.